Pakistan Economy - News & Updates - Archive

[Neo]

February 12, 2007

Pricing scarce industrial land

By Sabihuddin Ghausi

THE Punjab government is offering land to investors in Sunder industrial estate at Rs3.5 million an acre along with all the infrastructure facilities. The Economic Coordination Committee of the federal government also recently decided to offer 1,000 acres of Steel Mill land at Rs7 million per acre to investors reportedly along with infrastructure that does not match the quality being offered by the Punjab government. This is the same land acquired by the Steel

Mill way back in 1974 at the rate of Rs 3,600 an acre from Sindh government.

``Sindh may not be a well-governed province and Karachi may have many property ownership problems and yet a piece of land here fetches the highest price as compared to other parts of the country, ’’ a senior bureaucrat remarked. He says that Rs7 million for an acre of developed land near Pakistan Steel is ``too a low price. A land without any infrastructure facility located around Port Qasim now costs at least Rs10 million.

The escalating cost of Karachi land is discouraging the genuine investors. Imagine, an acre of land in SITE Manghopir being quoted at Rs60 million, at Korangi anywhere between Rs40-50 million and in any of the half a dozen industrial estates in and around the city for no less than between Rs25-Rs30 million an acre.

The Sindh government issued an ordinance offering industrial/commercial land at 25 to 50 per cent less than the market price to ``genuine investors’’. However, no rules were drawn up by the Provincial Industries Department or the Provincial Committee on Investment that operates from the Chief Minister House.

The ordinance has lapsed as it was never taken up by the Sindh Assembly for discussion. Neither the components of ruling coalition or the opposition considered it worth noticing. Now it is back to square one. While speculators keep the industrial investors away from the biggest city of Pakistan where an estimated an army of 1.5 to 2 million unemployed young men and women-- many educated and skilled--roam in search of jobs.

Three years ago, the federal Industries, Production and National Initiatives Minister Jahangir Tareen in an media interview promised to ``restore Karachi back to its leadership position’’ in economic development and industrial progress. But during the period, banks and running business in Karachi attracted foreign investors but no new projects or ventures came to light.

``We intend to make the National Industrial Park (NIP) operative in the near future, ’’ the minister told this correspondent by telephone from Islamabad. NIP is a government body with public money but wholly run by private sector which has managed a 248-acre plot near Korangi previously owned by the Pakistan Industrial Development Corporation. This will be the first phase of the project before the NIP moves to a 1,000-acre plot of Pakistan Steel. ``The plot will remain under the ownership of Pakistan Steel but will be managed by the NIP’’, a source said.

The NIP has 12 directors on the board of which nine are from private sector. It has a capital base of Rs325 million and it will generate more funds by selling of industrial plots.

According to its Chief Executive, Zubair Habib, the board of directors is in process of drawing up the rules for investors and working out prices of 4-5 acre plots to be offered mainly to small and medium entrepreneurs. Projects pertaining to light engineering, value added textile, information technology and gems and jewellery will be given preference.

It will also be ensured that any investor, given plots, completes civil work and commissions the projects within a prescribed time. A tools and equipment centre is about to start enrolling trainees, drawn mainly from the industries for exposing them to latest computer run state of art machines. Muneer Bana-- also from private sector-- has been given the task to run this institute which will enroll 550 students in its first year.

The local polytechnic and engineering colleges are said to be equipped with machines which have become outdated. The managers of the industry—mostly sons of the previous owners educated abroad—complain that engineers and technicians who come for jobs are not good operators of machines and equipment they have imported to upgrade production.

“Unemployment of the educated is a two pronged issue, ’’ said an industrialist. The young boys and girls seeking jobs lack exposure to modern equipment. It is the government’ s as well as the industrialists duty to work out crash programmes for these young men and women so that they would manage the new machines efficiently.

While all the reforms and a high economic growth has placed Pakistan on international investors’ radar, the focus is on acquiring the running business and banks. Acquisition and mergers do not generate many jobs and the ranks of unemployed keeps swelling

With no employment exchanges in operation or any agency monitoring unemployment, the growing lawlessness in the streets give some indication of desperation of the unemployed.

Jobs being created from public sector’s infrastructure development programmes like building of roads, dams etc are temporary and do not offer career opportunities. Career jobs come from investment in real sectors. But for a few sectors like telecommunication, it is not coming through direct foreign investment said to be at $3.5 billion in last six months.

Meanwhile the Sindh government remains divided into two camps which are indifferent to each other, even if not hostile-- which has created a diarchic situation with two power centres. There is an industries minister who hardly interacts with the businessmen and his department has no idea about functional or idle industries in the city or in the province.

There is a Provincial Committee on Investment said to be a private sector arm of the Board of Investment in each of the four provinces. There are 40 members on the Board in Sindh. This Committee met only a few times when Mian Mohammad Soomro was the governor and Hafeez Sheikh the finance minister of the province.

It was sometimes in 2001 when an economic revival programme for the province was launched and even a monitoring committee was announced to oversee the implementation. The then federal commerce minister Razzak Dawood convened a meeting of provincial investment committees of all the four provinces. Each of the provincial committee enjoyed a separate status.

But for now the biggest problem for the Sindh government is to contest EEC decision to dispose off Steel Mill land at Rs7 million and it has expressed its strong disapproval of this decision.

All other arguments notwithstanding, Sindh has a strong point. Provinces be given the right of ownership on their land so that they could offer it to investors on prices and terms which would attract business. Land is a tool that can be used for a healthy competition. The leaders in Sindh already feel bitter on the disposal of two Karachi islands to a foreign construction company.

With elections round the corner and if the statements of the big and small leaders of the federal and provincial governments are to be believed, one wonders how would they face voters who are groaning under high inflation, unemployment, closed industries and a an agriculture that has virtually now growing.

http://www.dawn.com/2007/02/12/ebr2.htm

 

[Neo]

Jan trade deficit widens to $1.13 billion

KARACHI: February 12, 2007: The country's trade deficit widened to a provisional $1.13 billion in January from $1.05 billion in December and $919.65 million in January 2006, official data showed on Monday.

The trade deficit for the first seven months of the 2006/07 fiscal year, that ends on June 30, widened to a provisional $7.59 billion from $6.52 billion in the corresponding period last year, the Federal Bureau of Statistics said.

Exports in January fell marginally to $1.20 billion, compared with $1.22 billion in January 2006, while imports stood at $2.33 billion, up from $2.14 billion in the corresponding month last year.

For the July-January period, exports were recorded at $9.63 billion and imports at $17.22 billion.

Exports and imports in the corresponding period last year stood at $9.27 billion and $15.79 billion respectively.

"Although oil prices have been falling, the quantity of oil being imported is rising, mainly due to growing electricity needs," said Ali Hussain, research head at brokers Invest Capital and Securities.

The statistics bureau has yet to release a break-up of the exports and imports.

Pakistan, which produces just over 65,000 barrels of oil a day, relies heavily on imported oil.

The country is expected to buy 25 percent more fuel oil for the current financial year because of higher demand from the power sector, according to industry estimates.

The country's total power generation capacity stands at 21,000 MW, of which 39 percent is by fuel oil.

"For the full year, the trade deficit will come around $12 billion to $13 billion," said Hussain.

Analysts said slow growth in exports was also a reason for the widening trade deficit.

http://www.brecorder.com/

 

[Neo]

Over $110 million foreign investment in local bourses

ISLAMABAD: February 12, 2007: Huge investment of over 110 million dollars were made in stock markets during the current month.

Private TV News channel quoting statistics of State Bank of Pakistan reported that investments of $491.6 million have so far been made at the stock exchanges of the country during the current fiscal year.

USA has again topped the investing countries and they have so far invested $294.5 million in Pakistani markets.

During February, the British investors unexpectedly dominated the scene with the investments of $72.7 million whereas the Americans came second with $53.2 million.

http://www.brecorder.com/

 

[Neo]

50 Power and Gas projects to be completed in next 9 years
Monday February 12, 2007

ISLAMABAD: Aiming to meet the electricity and gas needs in the country, the private sector would complete 50 more projects in the next nine years which would produce 13399 megawatt electricity .
Local and foreign companies would make investment worth of 12847 million dollars for this purpose and all matters in this regard have been finalized between these companies and Ministry of Water and Power and Private Power Infrastructure Companies.

According to a report of Ministry of Water and Power, 6 projects with the total cost of 1016 million dollars would be started in the next year which would produce 1355 megawatt electricity.

The report further said that 8 projects would be started in 2009, 7 in 2010, 10 in 2011, 5 in 2013, 3 in 2014, 6 in 2015 and 1 project would be started and completed in 2016.

http://www.paktribune.com/news/index.shtml?168674

 

[Owais]

Baglihar dam design violates treaty: World Bank

ISLAMABAD (February 13 2007): The World Bank's neutral expert on Baglihar dam, Professor Raymond Lafitte of Switzerland, has declared the design of Baglihar hydroelectric project, being constructed by India on the River Chenab in Indian Occupied Kashmir, in violation of the Indus Water Treaty of 1960.

Addressing a crowded press conference on Monday, the Minister for Water and Power, Liaquat Ali Jatoi, who flew in here all the way from Karachi particularly to announce the much-awaited decision, urged the Indian government to respect the neutral expert's verdict, which is also binding on both parties, and praised the World Bank for providing the services of the neutral expert.

He, however, did not agree with the expert's recommendations on spillways, saying that Pakistan would observe and assert its rights in accordance with the existing treaties.

He did not very clearly convey to India that Pakistan would go for arbitration if Delhi did the same, but an official present on the occasion told Business Recorder that Pakistan would adopt the policy of 'wait and see'.

If India challenged the decision to prolong the case in a bid to complete the construction of the dam by December this year, as was announced by Indian officials, Pakistan would also take the same course.

Sources said that Pakistan was still unsure if India would implement the decision of the neutral expert, "which is somehow binding on both countries", and asked the World Bank to take punitive action against India in case it failed to implement the verdict.

"The decision made by the neutral expert upholds Pakistan's contention that India's design is not in conformity with the design criteria on three of the four design features of the dam, which were objected by Pakistan," the minister said.

Flanked by the senior officials of the Ministries of Water and Power, Foreign Affairs and Information, Jatoi said that the final determination of the points of difference raised by Pakistan on the project was the success of Pakistan's principled stand.

The points of difference on the design of the project essentially pertained to four physical features of the dam. Pakistan's view was that:

(i) The free board for the dam was excessive, and provided capability to India for raising artificially the water level in the operating pool above the full pondage level (so its free board should be reduced).

(ii) The location of intake for the power plant was not at the highest level as required in accordance with the provisions of the Indus Waters Treaty, 1960 (so it should be raised).

(iii) The pondage in the operating pool, determined by India, was excessive (so it should be reduced).

The location of the spillway gates below the dead storage level was not at the highest level. Pakistan's view was that the location of the gates of the spillway, 27 metres below the dead storage level, was unnecessary.

Either an un-gated spillway or a surface gated spillway could be provided with the bottom of the gates at the highest level (dead storage level means, the level below which the water cannot be drawn down or depleted except in unforeseen emergencies).

The Treaty prescribes a comprehensive mechanism to process the differences and disputes for resolution between the parties under Article IX of the Treaty. India had shared the design of the project in 1992 to which Pakistan raised objections. It was Pakistan's contention that the Indian design was not compliant with the design criteria given in the Treaty. All efforts were made by Pakistan to settle the issues bilaterally at the level of the Indus Waters Commissions, Secretary Water and Power and at the highest political level.

In 2000, India started the construction work on the project without addressing Pakistan's concerns. Pakistan lodged a strong protest on further construction activity without addressing the issues, as it constituted a breach of the Treaty.

Since 1992, there had been several meetings between the Indus Waters Commissioners, which remained inconclusive. Subsequently, at the request of the Indian government, two meetings were also held at the secretaries' level.

The matter was also raised by the President and the Prime Minister of Pakistan with the Indian Prime Minister during their visits to India in 2005. During the meetings, it was emphasised that any breach of the Treaty would generate tension and would not be in the interest of peace.

As bilateral negotiations between the two countries were not making any headway while the construction work of the project continued uninterrupted, Pakistan was compelled to seek World Bank's intervention, as stipulated in the Treaty, to appoint a neutral expert to settle the issues.

Initially, India resisted the appointment of a neutral expert to settle the issue. However, the World Bank, upholding Pakistan's stance, appointed a neutral expert in accordance with the procedure laid down in the Treaty.

The neutral expert was appointed in May 2005. He obtained detailed information about the plant's design and respective point of view along with technical analysis from both parties. He also visited the site of the project.

The neutral expert has made specific recommendations for the changes as under:

(I) FREE BOARD: The neutral expert found that India's calculation on free board were inaccurate. He determined that crest level should be set at lowest level by India. He has accordingly directed India to reduce the free board from 4.5 metres to 3 metres (33 percent reduction).

(II) LEVEL OF POWER INTAKES: The neutral expert determined that the location of intake, stipulated by India, was not at the highest level, as required in accordance with the Treaty.

He has, therefore, decided that instead of locating the intakes at the elevation of 818 metres, it should be located at the elevation of 821 metres. In other words, three metres raise in the power intakes.

PONDAGE He has determined that the calculation methodology used by India was not in conformity with the Treaty. He has accordingly directed that India should reduce the pondage from 37.722 mcm to 32.56 mcm.

In respect to location of spillway gates, he has held these in conformity with international practice and state-of-the-art. However, he has observed that India's design and analysis is incorrect.

He has concluded that India is neither correct in analysis nor in calculations. The results of the model tests are also not "representative of reality" and are "illusory".

Pakistan's view is that the expert should have gone strictly by the Indus Waters Treaty, as any other practices are not relevant. Pakistan, therefore, reserves its right to pursue the matter further in accordance with provisions of the Treaty.

Pakistan had also challenged India's estimate of the maximum flood discharge at the site and in the decision the neutral expert has decided to retain India's value of design flood in view of the uncertainties of flood analysis.

By taking up the matter to the neutral expert, following have been accomplished: Established that the Indian design was a violation of the Treaty; and ensured the sanctity of the Treaty and demonstrated Pakistan's resolve to pursue its objectives on the basis of international legality and bilateral agreements.

The minister said that the government also wished to thank the neutral expert for the efforts and time devoted by him in formulating his determination. "We will carefully examine the determination and take appropriate steps in accordance with the Treaty to protect our interests," he said. He said that the neutral expert "has clearly stated" that India should modify the design of the dam.

"We received the verdict a short while ago and are still examining it in detail," he said, in reply to a question. The minister claimed that the neutral expert had allowed the height of spillways at 808 metres. "However, Pakistan has the right to pursue the matter in accordance with the treaty," he added.

He said: "If India would not have insisted on the same position, neither it would be a violation of the Treaty nor the people in Indian Occupied Kashmir would be deprived of electric power."

India has to demolish civil works it has already completed in violation of the Treaty and it would be again a success of Pakistan. Regarding Kishanganga dam, another controversial hydroelectric project, the minister said that once Pakistan challenged the Baglihar project, Indian cabinet decided to modify the design of Kishanganga, and no physical work has yet been started.

"We appreciate the efforts of the World Bank for providing the services of the neutral expert and our options are open on the issue of spillways," he added.

In reply to another question, he said: "When any donor, like the WB, which extends financial support to Pakistan and India, gives any decision, it is the moral obligation of that country to implement it".

He said: "Pakistan's options are open, and our legal experts are examining the case, and I urge upon the Indian government to respect the verdict of the neutral expert, which is in accordance with the Treaty." He added that India could boycott the proceedings of the expert, but it participated with full arguments.


http://brecorder.com/index.php?id=528073&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

China asked to allow market access to Pakistan's products
KARACHI (February 13 2007): A great number of people belonging to different walks of life visited Muslim Big, Business and Investment Gala at the Expo Centre and showed their keen interest in the stalls set up there. A large number of women also thronged the gala.

Speaking at a conference on "Investment Promotion of Ningxia Hui Autonomous Region China," Patron-in-chief of Pak-China Business Council, Tariq Sayeed said that trade between Pakistan and China had witnessed a steady improvement.

He said the trade volume, which was accounted for $600 million a decade ago, now had reached $3.17 billion, depicting an increase of 50 percent per year during the last 10 years.

He said China was now the second largest trade partner of Pakistan after the USA. However, he said, the share of Pakistan's exports to China was only 0.5 percent of its total imports, despite the fact that both the countries had been enjoying cordial relations.

He said there was an urgent need for China to allow greater market access to Pakistan's various products, which meet global quality standards and have won international recognition. "We are confident that if the importers in China gave preference to buy Pakistani items, it would not only increase our exports manifolds but also reduce our trade deficit," Tariq Sayeed said.

He said in 2005, China and Pakistan signed a landmark treaty of friendship and cooperation, whereby they committed that neither party would join any alliance or bloc, which infringes upon the sovereignty, security and territorial integrity of either country, while simultaneously positing that both parities would not conclude treaties of this nature with any third party.

He said China had provided technical and financial assistance to Pakistan in some of its major projects like Karakoram Highway, Heavy Mechanical Complex, Forge and Foundry Project, Heavy Rebuild Factory, Guddu-4 Thermal Power Stations, Heavy Electrical Complex near Haripur, Saindak Project in Balochistan and transfer of technology in 300 agro-based projects under its Spark Programme.

Consultant of the Peoples' Government of Ningxia Hui Autonomous Region, Hai Juzeng, in his speech said that Muslims were brothers and the traditional friendship and close ties between Muslims of Pakistan and Ningxia Hui Autonomous Region had been instrumental in further expanding economic and trade relations between them.

Director General, Board of Investment, Karachi, Arif Elahi said that it makes no difference if money comes from China to Pakistan or goes from Pakistan to China.

He said the government of Pakistan was now taking itself aside and providing opportunities to the private sector to make business, as this was not the job of the government to do business. Highlighting the boom of business activities in Pakistan, he said last year the Expo Centre remained occupied for more than 200 days.
http://brecorder.com/index.php?id=528143&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

'Pak-Iran Investment firm to operate from March'

KARACHI (February 13 2007): The Iran-Pakistan Investment Company will start operations in March from Karachi. This was stated by Iranian Consul General Seyed Musa Hosseini during meeting with Federation of Pakistan Chamber of Commerce and Industries (FPCCI) members led by FPCCI Vice President Zubair F. Tufail in Federation House, here.

The company will play its role in the development of basic infrastructure in Pakistan. Seyed Musa Hosseini, who is returning to Iran after serving as Iranian CG in Karachi for about three years, recounted the efforts made by him to promote economic cooperation between Pakistan and Iran.

Hosseini, who speaks fluent Urdu, said the selection of Pakistan for the diplomatic assignment was his personal choice because of friendly and brotherly ties between both the countries and wanted to contribute economic cooperation between them.-PR
http://brecorder.com/index.php?id=528151&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Gas supply from Iran by 2011

ISLAMABAD: Gas supply from Iran will commence by 2011 provided the agreement between Iran, Pakistan and India on the gas pipeline project is signed in June this year.

Participating in the Geo News programme “Tezi Mandi”, Managing Director Northern Gas Pipeline Rasheed Lone told that the price of gas has been determined under this agreement.

According to the formula, the gas price has been linked with the price of Japanese crude, from which gas is obtained and the per unit price of this gas is same or less equivalent to the price of locally obtained gas.

Rasheed Lone said that if each of these three countries lay their own pipelines then this project will easily be completed by 2011.

http://geo.tv/geonews/details.asp?id=2109&param=3

 

[Neo]

World Bank and Norway to finance community-based renewable energy project

FAISALABAD (February 13 2007): The World Bank and Royal Norwegian Embassy will provide financial assistance of $6.67 million and $1.64 million respectively, for Community-Based Renewable Energy Development in Northern Areas and Chitral. This project will be completed with total cost of $14.97 million.

Jeremy Levin, project leader of the World Bank said that the proposed development objectives of the Carbon Offset Project are; to reduce global emissions of carbon dioxide and increase access to modern energy from renewable energy sources.

The project will provide additional support to (a) develop hydropower potential in an environmentally and socially sustainable manner to meet local electricity demand, (b) improve access of rural areas to modern electricity services, and (c) improve standards of living for the poor through provision of community level infrastructure.

In his project study, Jeremy Levin said that this project would facilitate greenhouse emission reductions and support the development of the international market mechanism for trading Emission Reductions (ERs) developed in the framework of the Kyoto Protocol. The project consists of sale of ERs to the Community Development Carbon Fund (CDCF), which provides carbon finance to small-scale CDM projects in the least developed countries and poorer areas of all developing countries.

Operational since July 2003, the CDCF actively seeks to reach countries and communities that are neither presently benefiting from development through carbon finance nor likely to benefit greatly from it in the future, he added.

http://brecorder.com/index.php?id=528085&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

February 13, 2007
Trade deficit soars to $7.595bn

ISLAMABAD, Feb 12: Pakistan’s trade gap widened 16.43 per cent to $7.595 billion during the first seven months (July-January) of the current fiscal year compared to $6.52 billion in the corresponding period of last year.

In January the trade deficit grew by 23.18 per cent over January 2006 as exports dipped while imports rose at higher rate, according to official statistics released by Federal Bureau of Statistics (FBS) here on Monday.

Merchandise exports up marginally at 3.86 per cent to fetch a total $9.630 billion during the July-Jan period as against $9.271 billion the same period last year. An export target of $18.6 billion has been set for FY07.

Imports climbed by 9.05 per cent to $17.225 billion during the period under review as against $15.795 billion over the same period of the last year.

This high import growth has resulted in pushing the trade deficit further higher. The government has projected import bill at $28bn for the current fiscal.

Commerce Minister Humayun Akhtar Khan told Dawn that January was historically a slow month for exports. He, however, did not elaborate the reasons for this trend.

Mr Khan hoped that exports would pick up in coming months.

Answering a question the minister said that the export target would not be revised downward. “We will achieve the target,” the minister resolved.

Analysts said that the trade policy announced for the current fiscal would not help in reducing the imports and boosting the exports.

They said in case the trends continued for another few months it would have a serious impact on the country’s balance of payment.

They warned that the higher trade deficit would also have a negative impact on the health of the rupee. They said that for the current fiscal year this impact might be very nominal, which could be grave from the next fiscal year in case the current trend in the growth of imports remained the same.

http://www.dawn.com/2007/02/13/ebr7.htm

 

[Neo]

Current account deficit up by 46pc in 6 months

By Shahid Iqbal

KARACHI, Feb 12: Higher foreign investment may provide some relief to government, but the rising current account imbalance has posed a serious threat to the economy.

The current account deficit of the country increased by over 46 per cent during the first half of the on-going fiscal 2006-07 and the figure rose to $4.209 billion.

Though it is not surprising that the current account deficit has increased, the rate of its increase is a matter of concern.

The main reason for the large current account deficit is the rising trade gap. The balance sheet showed that in all major sectors, the country was on the negative side.

Trade gap during the same period rose by 22.7 per cent to $5.034 billion as against $4.102 billion in the corresponding period last year.

The worst part of the trade deficit was unexpected low export growth and high import growth.

It also reflects slow industrial and manufacturing activity which would generate unemployment.

The imbalances in services sector were also significant during the period as services credit were much lower than the services debit which means higher outflows and lower inflows in respect of services.

The latest figures of foreign investment issued by the State Bank showed that the foreign investment rose by 68 per cent during July-December.

Substantial high foreign investment is quite eligible to help the government to meet the current account gap. “The unreliable foreign investment is not the answer to the question of ever-increasing current account deficit,” said an analyst, adding the high export growth was the only reply to this serious threat.

Since investors have all rights to withdraw their investment and take back out of the country without any legal hurdle, it is unreliable, he said.

Foreign portfolio investment rose to $620 million during the six months and foreign direct investment reached $1.872 billion.

Interestingly, there were no inflows through privatisation which had been a part of foreign direct investment.The government has sold Global Depository Receipt (GDRs) of Oil and Gas Development Company (OGDCL) to earn about $800 million and the amount was shown as foreign private investment.

Prime Minister Shaukat Aziz had stated recently that the foreign investment would reach $6 billion by the end of this fiscal. This will be highly encouraging for the government as the rising current account deficit has been posing serious challenges for last five years.

“Foreign direct investment is still focused to just few sectors which require to be diversified and it can only happen once all major sectors, including agriculture sector, attract foreign investment,” said Aamir Aziz, an analyst.

http://www.dawn.com/2007/02/13/ebr4.htm

 

[Neo]

Australia to help boost mango output

MULTAN: Australian government would offer 34 million Australian dollars assistance to execute a three-year mango project in Pakistan. This was stated by the officials in a meeting chaired by City District Nazim Mian Faisal Mukhtar.

Horticulture Department of University of Queens Land, Australia, would execute the project aimed at enhancing mango production, post-harvest handling of the fruit including processing and grading, and finding cure for different diseases through research, says an official release.

Mango Growers Association (MGA) President Syed Zahid Hussain Gardezi, Vice President Muzaffar Hayat Khakwani, chief executive business development international Ettore, Dr Jahanzeb and mango growers attended the meeting.

Italian company’s head Ettore gave a briefing to the meeting about two mobile mango processing plants his company was intended to set up in Multan as pilot project under a Memorandum of Understanding (MoU) the company had signed with the city district government Multan (CDGM) few months ago. One processing plant would have the capacity to process 3000 kilogram mango per hour while the other 500 kg mango per hour.

http://www.thenews.com.pk/daily_detail.asp?id=42522

 

[Neo]

Doing business becomes easier in Pakistan: World Bank

LAHORE (February 14 2007): Doing business has become easier in Pakistan in 2005-2006 as reforms have reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements. This was stated in a new report on 'Doing Business in South Asia 2007', which was released by the World Bank and its private sector arm IFC on Tuesday.

The report maintained that out of the six major Pakistani cities covered by the report, Karachi has the most business-friendly regulations as measured by the Doing Business reports, while Quetta imposes the most complex and costly administrative barriers. Faisalabad, Lahore, Peshawar and Sialkot rank in between.

The report compares business regulations in the World Bank's South Asia region with 175 economies around the world. Pakistan, the runner-up reformer in South Asia, implemented reforms to simplify cross-border trade and reduce corporate tax rates.

THE TOP RANKED COUNTRIES IN THE REGION ARE: Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138) and Afghanistan (162).

According to the report, recent reforms have resulted in a drop in the number of days required to import in Pakistan: from 39 to 19 days. Pakistan now ranks 51st world-wide in time to import, based on a concerted effort to complement trade liberalisation with improved trade logistics. Pakistan also reformed positively in the area of taxation by steadily reducing its corporate tax rate, from 39 percent in 2004 to 37 percent in 2005 and 35 percent in 2006.

Like most other countries in the region, Pakistan scores well on the indicators related to starting a business (54th out of 175) and protecting investors (19th out of 175).

It observed that despite these improvements and recent reforms, Pakistan could do better on the overall ease of doing business. It finds that the greatest remaining obstacles for the country include enforcing contracts through courts, labour regulations, and paying taxes.

"For example, it takes 880 days or about 2.5 years in Karachi to resolve a commercial dispute. Despite the reduced tax rate, businesses must still spend about two months per year or 560 hours to comply with all tax regulations. And an employer who is faced with less demand for the products he sells must pay an average of 90 weeks of salary to make a worker redundant," the report said.

"Different provincial and municipal level regulatory requirements, as well as differences in the implementation of national-level regulations, either enhance or constrain local business activity.

This explains, for example, why in Sindh (Karachi), it only takes six procedures and 50 days to register property, whereas it takes 12 procedures and 96 days in Balochistan (Quetta), with the provinces of Punjab (Faisalabad, Lahore, Sialkot) and NWFP (Peshawar) falling in the middle," World Bank stated this in its report.

According to it, the provinces could learn from each other in the areas of business regulation where there are important regional variations. In Lahore, for example, starting a business is easiest; in Peshawar, resolving a commercial dispute through court is easiest and in Karachi, registering property could serve as best practice.

"One of the most interesting findings of the report is how Pakistan could improve significantly if it simply adopted the best practices in business regulation that already exist within the country. Pakistan could jump from its current position at 74th to 52nd on the Doing Business rankings," said Caralee McLiesh, one of the authors of the report.

Meanwhile, 'Doing Business in South Asia 2007' is the third report in a series of South Asia regional reports based on the methodology of the annual global Doing Business report.

Doing Business tracks a set of regulatory indicators related to business start-up, operation, trade, payment of taxes, and closure by measuring the time and cost associated with various government requirements. It does not track variables such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. This year's report covers six Pakistani cities in four different provinces.

The Doing Business project is based on the efforts of more than 5,000 local experts, business consultants, lawyers, accountants, government officials and leading academics around the world, who provide methodological support and review.

http://www.brecorder.com/index.php?id=528399&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Slow growth in exports: seven percent GDP target may not be achieved

ISLAMABAD (February 14 2007): The Planning Commission has expressed fear that the government may not achieve current fiscal year's Gross Domestic Product (GDP) target of 7 percent due to slow growth in exports, official sources told Business Recorder here on Tuesday.

"There is likely a shortfall of $1 billion in exports target of $18.6 billion which will result in GDP growth rate slippage, though only marginal," sources quoted a recent analysis conducted by the Planning Commission on the country's foreign trade and the constraints impeding exports.

They said that the shortfall in exports would be mainly attributed to high cost of doing business, stiff competition with neighbouring countries' exporters who get benefit from their governments in the shape of subsidies and other incentives.

"This situation will lead to closure of firms, especially in the textile sector and increase in portfolio loan, making their revival costlier," sources added. The Planning Commission is also of the view that Pakistan would lose international market, difficult to recapture in future, they said.

"Based on the analysis of the recent declining trends in textile and opportunity analysis in some key sectors, support should be extended to the selected industry to the tune of Rs 3 to 4 billion," sources quoted the Planning Commission as suggesting to help out the textile sector.

It has also proposed that electricity, gas and water tariff be capped for at least two years, in addition to market access support at the rate of 5 percent FOB to offset discrimination in tariff rates in importing countries and adverse travel advisories.

The Planning Commission further said that the mark-up rates on pre- and post-shipment export refinance should be suitably reduced and knitwear/garment industry may be charged @ B-4 tariff of Wapda, irrespective of existing sanctioned load.

According to sources, the PC has also recommended to the government to constitute a 'National Export Strategy Team' (NEST) comprising all key stakeholders (TDAP to serve as secretariat), which may design medium- and long-term export strategies.

The PC is also of the view that a specific strategy for each priority product and each targeted country should be adopted to define and justify export priorities on the basis of realities in the international marketplace, domestic supply capabilities and competitiveness.

"The government should critically assess the level and quality of financial, institutional and personnel resources that are available within the country to implement a national export development strategy," sources added.

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Chinese study confirms enough coal in Thatta: SCA

KARACHI (February 14 2007): A Chinese study has confirmed sufficient coal availability for mining and power plants at Sonda-Jherruk, Thatta. Sources in the Sindh Coal Authority (SCA) on Tuesday said.

The China National Machinery Import and Export Corporation (CMC) had completed detailed coal geological investigation (DCGI) and confirmed one billion tonnes of coal available at Sonda-Jherruk, Thatta for mining purpose and feeding power plants.

The company had planned to set up two 300 mw coal-fired power plants in the area and in this regard started investigation in early December 2006. The company drilled 20 holes in the area and coal availability found below than the required level. The underground coal mining was known as difficult task, but the company claimed that they had capability of overcoming this, sources said.

The Chinese company had signed an agreement with the Sindh government on November 25, 2006 to conduct DCGI for coal mining and set up two 300 mw coal-fired power plants in Sonda-Jherruk. Sindh Mines and Minerals Development Secretary Abdul Hameed Akhund and CMC Vice President Shan Wei signed the agreement at the provincial minister's office.

According to t6hye agreement, the company had to complete geological investigation on 56.7 sq. ft area in three months and later they would start coal-mining and set up two 300 mw coal-fired power plants. The Chinese company had to bear the cost of the DCGI.

The identified reserves at Sonda-Jherruk, the second largest in Sindh, comprising more than seven billion tonnes of coal, is located at a distance of around 150-km to north-east of Karachi and about 30-km to south-east of Hyderabad, where all required infrastructures have been made by the provincial government, sources said.

The company had also signed another memorandum of understanding (MoU) in July 2006 with the SCA to conduct detailed feasibility study for the development of a coal-mine of one million tonnes of coal annual production capacity.

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